Archive for November, 2012

WOW! I can’t believe December is here already. I hope everyone has a wonderful holiday season, filled with lots of love, laughter, good health and much happiness and success for the coming year. Here are some fun things that are going on in December!

Coronado Christmas Parade – Open House – Snow Mountain
Santa arrives by ferry and a festive parade along Orange Avenue follows, while merchants keep their doors open late for shopping. There will be a snow mountain and tree lighting by Santa himself. This is a free event.

Mission Bay Christmas Boat Parade of Lights
A decorated and lighted boat procession will parade in single file on Mission Bay, some boats broadcasting holiday music. The parade ends with a firework display and the lighting of the SeaWorld Skytower Tree of Lights.

41st Annual San Diego Bay Parade of Lights
This event features a large fleet of private craft decorated and illuminated for the holidays. The boat parade will travel a 7-mile route from Shelter Island to Coronado. This is a free event.

Christmas in the Village
There will be a holiday parade, strolling minstrels, carolers and street entertainers, food & commercial vendors, Santa, carnival rides, ponies, puppet shows, horse-drawn carriages and even bonfires along the Boulevard.

Jungle Bells
Starting December 15th, the San Diego Zoo is transformed into a magical winter wonderland. You’ll find a nightly tree-lighting ceremony, bell ringers filling the air with music, and lighted animal figures dotting the grounds. Free with zoo admission.

Time: Refer to website for specific times and datesLocation: San Diego Zoo, 2920 Zoo Dr., San Diego

5th Annual Poinsettia Bowl Gaslamp March
The marching bands from each of the competing schools in the Poinsettia Bowl will parade in the Gaslamp Quarter, beginning at opposite locations and meeting mid-way on their route where they play their music together (Battle of the Bands) and then continue onward, separately. This is a free event.

2nd Annual Holiday Wine & Food + Pet Festival
This festival is the largest holiday celebration for pets and children in the southwest. There will be one-of-a-kind gifts, Santa Claus, and holiday pet tricks and costumes.

Port of San Diego Big Bay Balloon Parade
America’s Largest Balloon Parade! Massive inflatables, numbering more than any other parade in the nation, colorful floats, unique drill teams, and marching bands, the Budweiser Clydesdale horses, and the Wienermobile!!!

I recently came across a home that was for sale by owner. My client and I had been out looking at properties, and she later drove back through a neighborhood she particularly liked. She noticed a For Sale sign partially obscured on a home, which we had not noticed. I searched the internet for information about the home, but found nothing indicating it was for sale. I called the very nice owner, but when we finally connected my client had already flown back home and he did not want to cooperate with agents.

I know there are many agents out there who specifically seek out for sale by owner (or FSBO) properties, and many of them make it a priority to get those homes listed. But there are some big problems on both sides that need to be considered before hanging up a FSBO sign.

Issues Owners Must Consider

1. Exposure. As indicated in my example above, if you are going to sell your home it is extremely important to get exposure. The MLS is the number one place to showcase your listing, as thousands of property sites (where the buyers are looking) link to the MLS. Most active buyers have searches, oftentimes multiple searches, set up on agent sites and other house hunting sites like Zillow, Trulia and Redfin. If your home is not there, these buyers have NO idea it is for sale. In today’s market, where there is little inventory in most places, and where there ARE active buyers (and many multiple offer situations), it is simply silly not to have your home on the MLS.

If you still insist on trying to sell yourself, my best advice to you is to get your listing on the MLS. There are brokerages that will charge a small fee to do so, without doing any other work for you. It is well worth the expense.

2. Calls from LOTS of agents…who will want to know if you are willing too cooperate with them should they bring a buyer to your home. Most buyers DO work with agents, and if you are not willing to do so yourself you could be losing qualified buyers. An agent will not show your home if s/he will not get paid for making a sale and doing all the work involved in an escrow.

3. Unqualified buyer issues. If you do find buyers who are interested and not represented by an agent, you will be responsible for making sure they are qualified. This requires a lot of leg work, which most agents do before showing homes to their clients. You could take your home off the market for weeks assuming your buyers are qualified, only to find they are not. During that time you could have found other buyers, and then you will have to start all over.

4. Possibility of no showings, as many buyers are working with agents. This goes hand in hand with some of the above points.

5. Loads of paperwork and legal ramifications. If you are representing yourself in the sale of your home, you’d better be careful. You need to fill out a disclosure packet, and if you leave out crucial information it could come back to bite you down the road. An agent on your side is there to make sure you have filled out the disclosures correctly, and that all the paperwork is in order. Also important, if there ever is a legal problem down the road (and this is not a rare occurrence), it is nice to have the brokerage on your side to help you.

6. Other warnings. It is very important to note that if you are delinquent in your mortgage and are trying to do a FSBO, BEWARE. This is not something you should attempt on your own. You need to find a local agent who is experienced in delinquent properties so that you can discuss your options. If a short sale is an option I advise you to not even contemplate attempting one on your own. There are people who are experienced with short sales who can help you, providing a much stronger chance of approval.

Issues Buyers Must Consider When Purchasing a FSBO

1. No representation = Possible Legal issues. As discussed above, if you are a buyer purchasing a FSBO without an agent to represent you, you need to be very careful. If the owners do not fill out paperwork correctly and fail to disclose something, which later becomes an issue, you could be stuck with a legal dilemma. If you have an agent on your side to review all documentation and make sure you are legally protected, you will be in a much better position.

2. Escrow is a neutral party. It is important to know that the escrow officer can help you in some ways, telling you what paperwork you need. But keep in mind that escrow is a neutral party, and cannot give you any legal advice – they do not represent the interests of any single party to the sale.

3. Pricing. Make sure, if you are purchasing a FSBO property, that you have a copy of recent sold comparables in the area, and that you understand the prices and reasons for them. You obviously do not want to overpay for a home. This is not something you have to have an agent to do, but local area agents are usually very in touch with area sales and could explain to you why a particular home sold for more or less than the comps, and in doing so figure out the “right” price for a home you are thinking of purchasing. Most FSBO owners are savvy and know the neighborhood comps, but it is still important to study them yourself, especially if you are purchasing the property with a loan – lender scrutiny is rigid, and if the home doesn’t fit in with the recent comparables your loan will be denied (unless of course you renegotiate price with the seller at that point…something you need to be prepared to do well).

4. Must-Do’s in Buying FSBOs. If you are a buyer contemplating a FSBO purchase, it is imperative you do the following: get pre-approved with a lender first, get a good comparable market analysis – CMA (which you may be able to get from a local area agent even though they are not representing you), make sure you connect with escrow to understand what paperwork is needed, and have a home inspection.

Short sales have become part of the real estate landscape, and as one in four homeowners are underwater nationwide, they will likely continue to stay there for some time. Lenders have finally accepted this and have been trying to implement new programs to make them a better choice than foreclosures. For the most part, they are on the right track, but we are still seeing resistance and lots of snares in the road. The new Fannie Mae/Freddie Mac short sale program offers something big to struggling homeowners: the chance to short sale their homes even if they are current on their mortgage payments.

Normally, in order to short sale your home you have to be delinquent on your mortgage payments. Some lenders say they will consider short sales for those not yet delinquent, but the reality is that until you are late with your payments they don’t have the time to tango. Now, if your loan is securitized by Fannie or Freddie, you could be eligible for a short sale even if you are not delinquent, but can prove a hardship.

If you are in this situation you will need to contact your mortgage servicer and ask them to participate in the Fannie/Freddie non-delinquent short sale program. You will want to find a qualified area real estate agent who is experienced in selling short sales, and get your home listed on the market. Once you find a qualified buyer, you will present the contract to your servicer, along with proof of hardship (there is a packet of information you will have to provide – whether your servicer wants it up front or at the time you have an accepted offer will be up to the servicer).

Hardships: There are multiple kinds of hardship that could be acceptable. These may include job loss, injury or disability, major illness, job transfer (there are usually mileage requirements), pay cuts, divorce, and death of a borrower or wage earner, to name a few. If you think you have a hardship, contact your servicer to find out whether you qualify.

Caveats: There are a few things you want to watch out for if you are able to go through a short sale under this new program.

1.Credit implications: As with every short sale, you will need to be aware of potential credit hits. There is no lesser effect for these types of short sales, however, apparently it is in the works. Typically with a short sale you can expect your credit score to drop up to 150 points, but that really depends on where it was before you were approved for a short sale. I have seen some sellers take a big hit, and others barely see any negative effects. If you keep in mind the 150 number, that is most likely the worst case scenario. Hopefully soon there will be an exception with the credit bureaus for these types of short sales.

2. Second liens are another potential snake in the grass with the new program. First lienholders have agreed to pay only up to $6000 to second lienholders upon a successful short sale closing under the program. If you have a large outstanding second lien balance, there is a chance that lienholder may refuse to accept this sum (which is ridiculous, as they would likely get nothing if the home went to foreclosure, but such is the case). Make sure you know exactly how much you owe and what the second lienholder’s policy is – a savvy short sale agent/negotiator will know how to help in this regard.

3. Deficiency states: if you live in a deficiency state (where the state can go after you for the difference between the short sale price and what you owed on your mortgage), you need to beware. The lender may require a cash contribution to cover the difference on the loan balance, or possibly have you sign a promissory note. California is NOT a deficiency state, so selling your home via short sale requires NO contribution from the borrower, and there is no state tax liability on the sale.

As always, I recommend really understanding all the implications of a short sale before embarking on one. Make sure you hire an agent who really knows how to negotiate, as well as all the steps involved throughout the short sale process. If you are informed you will make the best decisions for you and your family. To find out whether your loan(s) is owned by Fannie Mae, visit https://www.knowyouroptions.com/loanlookup. For Freddie Mac loans, go to https://ww3.freddiemac.com/corporate/.

The election is finally over…thank goodness, because all the negativity and blaming was getting annoying. I actually found it hard to log into Facebook or turn on the television. So now we are faced with an important task, no matter who you voted for: moving forward and healing this country. Most importantly, it is time to stop bitching and griping, because that won’t help anyone – there is no easy button to push.

Here are some things we can learn from the election to help us become better Americans and better people:

1. Decide to be a do-er, not merely an observer. People like to complain and place blame on others when things don’t go their way. This is just human nature, and some folks are louder than others. It’s ok to voice your opinion, and we are lucky to be able to do so. But those who do nothing but complain need to take heed: things will never get done if you just sit back and watch (and complain). I think this is a very good time for every American to ask, “how can I help?” Jump in there and make a difference. If you don’t think you can, then you may not truly understand what it means to be an American.

2. Listen. When we get upset we tend to not listen. You can be upset about election results, but what you do from there will determine your happiness. The key is to LISTEN. Listen to other solutions, suggestions, and theories, then think of ways to put a plan into action.

3. Compromise. You cannot change results most of the time, but what you CAN do is use your great ideas and share them, in the hopes of making things a little bit better. Oftentimes you will need to compromise, so do not let that stubborn voice prevent you from making positive changes…you have to sometimes start small, remember? Don’t go into things with an “it’s my way or the highway” attitude. SHARE, LISTEN, and then see how you can help in a positive way by giving in a bit.

4. Start making a local difference right away! (this goes hand in hand with number 1) If you feel there are simply too many things that need to be changed, you need to pick one and get started. See how you can help in your hometown. Upset about school issues? Volunteer and help create new programs for students. I have done that in the bullying realm, even though there was a lot of resistance at first, and boy did it feel great to bring such an incredible program to our district and students. Sometimes you have to start small and focus on one thing at a time, but don’t let people say you can’t make a change!

Finally, if you are unable to learn anything of value from the election, you may want to move out of the country, because there are those of us who want to make America strong and vibrant again…your negativity just creates too much interference. The problems we have today cannot be put on the shoulders of one person, or one administration. We need to get moving in the right direction again, and every one of us can help to do so.

If you still want to move out of the country after all the above advice, please keep in mind that if you live in San Diego, I can help you sell your home! [Hopefully I made you laugh!]

Bank of America issued a notice recently to agents about the possibility of selling off loans in the middle of a short sale, which could drastically affect your short sale (and even cancel it last minute). It is very important that both homeowners and their agents understand what is happening, before listing a property for short sale.

As is customary, many lenders sell loans, even those that are delinquent – this is nothing new. But the fact that B of A sent out a notice about it is concerning, because of the timing that is mentioned for possible sales. The notice states that while in the midst of a short sale, borrowers’ loans may be sold to other servicers. If that happens, there is no guarantee that the pending short sale will close. Here are the steps by which this may happen (as spelled out in the notice):

• Bank of America will send the homeowner a letter 15 days before the servicing transfer date.

• Bank of America may call the agent to advise of the impacts to the short sale.

• The new servicer will send a letter or statement advising the homeowner where to send payments.

• If an offer has already been accepted on your short sale, a closing has been set and an approval letter issued, the new servicer will determine if the short sale will continue. (Yikes – a little too much discretion here!).

The scary part is that B of A is giving itself an out – why would a lender approve a short sale, only to then sell the loan while the property is in escrow? This makes not sense whatsoever. B of A states, “Real estate professionals should advise homeowners that, similar to foreclosure, a servicing transfer is a risk that may occur at any time during the short sale process. This is why it is important to move as quickly as possible to facilitate the short sale.” Wow – if I have to tell this to potential short sellers, why would they want to risk a short sale? Why would a buyer want to risk making an offer, with the very real prospect of losing money and not closing? And why would I, as an agent, want to risk spending marketing dollars and time in selling the property? NO ONE WINS!

It seems to me here that B of A is trying to cover it’s behind, but this warning and the described act is contradictory to short sale approvals.

The solution here is this: if you have a B of A loan and are considering a short sale, you need to have your agent or negotiator discuss this with B of A before listing your home. I would ask to get something in writing that B of A will not sell the loan after the short sale has been approved and during the escrow period, up until the deadline that is provided in the approval letter. This applies whether you have a first or second loan with the bank. If B of A is not willing to do this, you can either take a risk or look into other options.

This move is a step in the wrong direction by B of A, and thus they remain on the top of my “lenders who are not cooperative” list. What a shame that this bank – Bank of AMERICA, for goodness sake, is not willing to truly help American homeowners. Maybe they ought to think about a name change.